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Aspiring Lawyers - Interviews & Vacation Schemes
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Commercial Awareness Update - February 2019!
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<blockquote data-quote="kitk" data-source="post: 9606" data-attributes="member: 157"><p><strong><u>3. Amazon’s ill-fated NY HQ2 (By: Shu Qin)</u></strong></p><p><strong></strong></p><p><strong>The story:</strong></p><p><strong></strong></p><p>Last year, Amazon launched a highly publicised search across North America for a second headquarters. The new ‘HQ2’, Amazon promised, would bring $5 billion in direct investment, and over 50,000 new jobs to the chosen city. After a long selection process spanning 14 months and hundreds of applications from cities all over the continent, Amazon announced in November last year that it would be opening a split HQ2 in both New York and Virginia. However, barely three months later, Amazon announced on Friday that it would be withdrawing its plans to build HQ2 in New York. </p><p>Amazon cited the opposition of local politicians as a key reason for its decision. Amazon’s New York HQ2 plans have faced considerable opposition from Democrat leaders such as Alexandra Ocasio-Cortez. Under the agreement, Amazon would have benefitted from up to $3 billion of government incentives and subsidies in return for creating 25,000 new jobs in New York. This was widely criticised as highly extortionate, especially considering that Amazon is the world’s most valuable company.</p><p></p><p><strong>Impact on businesses and law firms:</strong></p><p></p><p>For businesses, Amazon’s decision to pull out of New York illustrates the importance of broader reputation and corporate practices. Congresswoman Ocasio-Cortez celebrated Amazon’s decision to withdraw HQ2 from New York as an example of standing up to ‘corporate greed’ and Amazon’s ‘worker exploitation’. While opposition to HQ2 had stemmed from the extortionate incentives offered by the city of New York, attention also spread to Amazon’s broader corporate practices, such as its resistance to unionised workers, its refusal to provide public benefits for workers, and its links to the US Immigration and Customs Enforcement (ICE).</p><p> </p><p>For law firms, this saga also illustrates the growing role of political activism in the broader regulatory landscape. This will likely encourage greater due diligence for companies and their business activities, to ensure that deals are executed with as little political hindrance as possible.</p><p></p><p><strong><u>4. UK Economic Slowdown (By: Sara)</u></strong></p><p><strong></strong></p><p><strong>The story</strong></p><p></p><p>The figure released last Monday (11th Feb) by the Office for National Statistics showed that the British economy grew just 0.2% in the last quarter of 2018. This was slightly lower than many city economists’ estimation of 0.3%. The rate is one-third of the rate of growth in the third quarter, which was 0.6%. Brexit uncertainties played a huge role in the slowdown, but the overall global slowdown was also detrimental. The US-China trade war shook global trade and China’s economic downturn meant fall in demand from one of the world’s biggest consumer group. </p><p></p><p>However, hopeful news came on the same day that the UK signed a post-Brexit trade deal with Switzerland, a country with which the UK conducts £32 billion worth of trade. With the UK working on singing 40 more free trade deals with other countries by replicating currently existing trade agreements with those countries before March 29th, hopefully, the effects of economic uncertainties get alleviated and give a boost to the economy. </p><p></p><p><strong>Impact on businesses and law firms</strong></p><p></p><p>Economic uncertainties shrouding the UK has led to a plunge in sterling, which led to inflation and cut back of consumer spending. This combined with the ramifications of the US-China trade war and China’s economic crisis and hit the British companies hard, leading to the collapse of several big high street brands such as Oddbins and HMV. Activities in the housing market also dropped to the lowest for 20 years and prices dropped by 2.9% in January from December as people became reluctant to spend huge sums of money amid uncertainties. Business investment has been continuously falling since the Brexit vote (businesses had invested $28 billion less since the vote) and it dropped 0.9% in 2018. Recently, Japanese carmaker Nissan Motor Co withdrew from its plan to build a new model in Sunderland and Airbus SE warned that it will pull out UK investments if the no-deal Brexit materialises. </p><p></p><p>Falling business investments as firms put projects on hold or seek alternative countries for the project means less work for commercial law firms, especially departments like M&A, banking and finance, real estate and tax, which play crucial roles in advising companies on M&A deals, and financing projects in cost-effective ways. In contrast to this, restructuring and insolvency departments have seen an increase in cases as numerous high street firms go into administration.</p></blockquote><p></p>
[QUOTE="kitk, post: 9606, member: 157"] [B][U]3. Amazon’s ill-fated NY HQ2 (By: Shu Qin)[/U] The story: [/B] Last year, Amazon launched a highly publicised search across North America for a second headquarters. The new ‘HQ2’, Amazon promised, would bring $5 billion in direct investment, and over 50,000 new jobs to the chosen city. After a long selection process spanning 14 months and hundreds of applications from cities all over the continent, Amazon announced in November last year that it would be opening a split HQ2 in both New York and Virginia. However, barely three months later, Amazon announced on Friday that it would be withdrawing its plans to build HQ2 in New York. Amazon cited the opposition of local politicians as a key reason for its decision. Amazon’s New York HQ2 plans have faced considerable opposition from Democrat leaders such as Alexandra Ocasio-Cortez. Under the agreement, Amazon would have benefitted from up to $3 billion of government incentives and subsidies in return for creating 25,000 new jobs in New York. This was widely criticised as highly extortionate, especially considering that Amazon is the world’s most valuable company. [B]Impact on businesses and law firms:[/B] For businesses, Amazon’s decision to pull out of New York illustrates the importance of broader reputation and corporate practices. Congresswoman Ocasio-Cortez celebrated Amazon’s decision to withdraw HQ2 from New York as an example of standing up to ‘corporate greed’ and Amazon’s ‘worker exploitation’. While opposition to HQ2 had stemmed from the extortionate incentives offered by the city of New York, attention also spread to Amazon’s broader corporate practices, such as its resistance to unionised workers, its refusal to provide public benefits for workers, and its links to the US Immigration and Customs Enforcement (ICE). For law firms, this saga also illustrates the growing role of political activism in the broader regulatory landscape. This will likely encourage greater due diligence for companies and their business activities, to ensure that deals are executed with as little political hindrance as possible. [B][U]4. UK Economic Slowdown (By: Sara)[/U] The story[/B] The figure released last Monday (11th Feb) by the Office for National Statistics showed that the British economy grew just 0.2% in the last quarter of 2018. This was slightly lower than many city economists’ estimation of 0.3%. The rate is one-third of the rate of growth in the third quarter, which was 0.6%. Brexit uncertainties played a huge role in the slowdown, but the overall global slowdown was also detrimental. The US-China trade war shook global trade and China’s economic downturn meant fall in demand from one of the world’s biggest consumer group. However, hopeful news came on the same day that the UK signed a post-Brexit trade deal with Switzerland, a country with which the UK conducts £32 billion worth of trade. With the UK working on singing 40 more free trade deals with other countries by replicating currently existing trade agreements with those countries before March 29th, hopefully, the effects of economic uncertainties get alleviated and give a boost to the economy. [B]Impact on businesses and law firms[/B] Economic uncertainties shrouding the UK has led to a plunge in sterling, which led to inflation and cut back of consumer spending. This combined with the ramifications of the US-China trade war and China’s economic crisis and hit the British companies hard, leading to the collapse of several big high street brands such as Oddbins and HMV. Activities in the housing market also dropped to the lowest for 20 years and prices dropped by 2.9% in January from December as people became reluctant to spend huge sums of money amid uncertainties. Business investment has been continuously falling since the Brexit vote (businesses had invested $28 billion less since the vote) and it dropped 0.9% in 2018. Recently, Japanese carmaker Nissan Motor Co withdrew from its plan to build a new model in Sunderland and Airbus SE warned that it will pull out UK investments if the no-deal Brexit materialises. Falling business investments as firms put projects on hold or seek alternative countries for the project means less work for commercial law firms, especially departments like M&A, banking and finance, real estate and tax, which play crucial roles in advising companies on M&A deals, and financing projects in cost-effective ways. In contrast to this, restructuring and insolvency departments have seen an increase in cases as numerous high street firms go into administration. [/QUOTE]
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